BMW Hits 2007 Profit Target, Proposes Dividend Hike
BMW, the world's largest premium carmaker, reported slightly better 2007 results than expected on Thursday and named a new head of sales and marketing as its aims to boost sales at all three brands this year.
Earnings before tax fell 6.1 percent to 3.87 billion euros ($5.95 billion) compared with the average estimate of 3.80 billion from a Reuters poll of 18 analysts. Adjusted for a one-off gain in 2006, pretax profit rose 0.6 percent, it said.
The company had failed to meet market expectations for the three previous consecutive quarters.
It proposed raising its dividend by 51.4 percent to 1.06 euros per ordinary share, compared to the poll estimate of 1.05 euros per share.
BMW named Ian Robertson, the head of its Rolls-Royce luxury limousine business, as head of group sales and marketing with immediate effect.
He replaces Stefan Krause, who is unexpectedly leaving to join Deutsche Bank to eventually take up the post of finance chief.
Krause was BMW's CFO for years before the company announced in September as part of its strategic review that he would swap jobs with then-sales chief Michael Ganal starting in October.
Krause was intimately connected to BMW's foreign exchange strategy that analysts considered risky since it involved speculating on future developments in currency rates.
BMW shares fell 3.6 percent to 32.60 euros.
"The numbers were all right but it seems the news that the sales and marketing chief is leaving is not going over so well," one trader in Frankfurt said.
Net profit at BMW rose 9 percent last year to a record 3.13 billion euros, helped by a one-off tax gain as well as record unit sales and revenue.
Pretax profit at its core automotive business rose 7.3 percent to 3.23 billion euros despite the drag from the dollar's weakness and high raw materials prices. Its operating margin was steady at 6.4 percent.